Growing and then protecting your 401k balance is critical for a comfortable retirement at a time when most people don't have a traditional pension. A 401k's expected rate of return, according to financial advisors, is typically between 8% and 10%. here are the strategies to maximize those.

Use a Roth 401k to Diversify

A rising number of firms are now offering a Roth 401k plan, which allows employees to invest after-tax monies and receive tax-free payouts in retirement. Young and low-income workers who expect to be in a higher tax bracket later in their careers benefit the most from a Roth 401k, but it can also bring tax diversification and flexibility to the portfolios of those closer to retirement.

Rollover With no Fees

When you move jobs, you usually have the option of leaving your 401k balance with your previous employer or rolling it over to an IRA or your new employer's 401k plan. If you decide to shift your money, instead of writing a check, ask your previous company to transfer the balance immediately to the new financial institution, which will help you avoid taxes and penalties.

Minimize Fees

Over the course of your career, high-fee investment options will drastically erode your 401k balance. Some 401k investments have quite high prices. You should choose the lowest-cost investment in your 401k plan that also matches your risk tolerance. If your 401k plan has a high cost, you might want to consider saving in an IRA instead of a 401k once you get the match.

Understand required Minimum Distributions

You must accept annual payments from your 401k after the age of 72. Failure to remove the correct amount results in a penalty of 50% of the amount that should have been withdrawn. To avoid the penalty, make sure you take the statutory minimum distribution each year in retirement.

Your retirement is special. Make sure you have more than the person who did not follow a strategy by using a Roth 401k, doing rollovers with no fees, minimizing fees everywhere, and understanding minimum distributions. When you strategize for your retirement, you will have a retirement that is noteworthy in terms of what you can do while others cannot.